India and the European Union (EU) have successfully concluded negotiations for the proposed Free Trade Agreement, commerce secretary Rajesh Agrawal said on Monday. He said the deal, to be announced formally on January 27, is “balanced and forward-looking,” which will help improve India's economic integration with the EU.
“The deal will come into force sometime next year. Legal scrubbing of the text will take 5-6 months; formal signing will be done post that,” Agrawal was quoted as saying.
“Negotiations have been successfully concluded. The deal has been finalised. It will propel trade and investments in both economies,” he added.
European Council President Antonio Costa and European Commission President Ursula von der Leyen are in New Delhi on Monday as chief guests for the 77th Republic Day and to partcipate in the 16th India-EU Summit.
Prime Minister Narendra Modi said India is privileged to host the leaders, adding that the presence of the EU delegation underscores the growing strength of their partnership. In a post on X, the commission said, "Our partnership is built on a shared goal to tackle the world's greatest challenges. As we look forward to tomorrow's EU-India Summit, we are ready to take our next step together."
How deal was fast-tracked
India and the EU pushed to close the deal after PM Modi and President Ursula von der Leyen agreed to fast-track negotiations last year. Two-way talks, relaunched in 2022 after a nine-year lull, gathered momentum after Trump imposed import tariffs on several trading partners.
{{/usCountry}}India and the EU pushed to close the deal after PM Modi and President Ursula von der Leyen agreed to fast-track negotiations last year. Two-way talks, relaunched in 2022 after a nine-year lull, gathered momentum after Trump imposed import tariffs on several trading partners.
{{/usCountry}}An India-US trade deal is since hanging.
Both the EU and India had been locked in last-minute give-and-take, mainly over cars and steel trade, news agency Reuters reported. The EU sought sharp cuts by India in import duties on its cars that currently exceed 100%, while India, a major steel producer, has been pushing the EU to reduce trade curbs to its steel exports. Reuters reported on Sunday that India was planning to slash tariffs on cars imported from the EU to 40% from as high as 110% as part of the deal.
Negotiations excluded some sensitive farm and dairy items, as New Delhi maintains the need to protect its farmers.
What EU says about ‘mother of all deals’ with India
European Union Trade Commissioner Marcos Sefcovic said the long-awaited agreement could significantly open the Indian market to European firms. In an interview with Euro News ahead of the high-level EU-India summit, Sefcovic also described the pact as the "mother of all deals", using Ursula von der Leyen's words.
He noted that negotiators are "checking their final numbers" as the European bloc pushes to reduce India's steep import duties, which can reach up to 150% in some sectors.
According to Sefcovic, the agreement would create a free trade area encompassing roughly 2 billion people and lift many Indian customs duties on European goods, although sensitive sectors will be excluded to focus on “the positive outcome”.
"This is the largest trade deal ever," he said, highlighting that around 6,000 European companies already operate in India; and trade between the two partners has surged significantly over the past decade.
Brussels views the deal as a strategic move to diversify its trade ties beyond the United States and China, while Indian officials have signalled willingness to open markets to foreign investment and goods in key areas.
Vice-President of the European Commission, Kaja Kallas, also signalled strong momentum in EU-India relations spanning trade, security and defence cooperation. She said in a post on X that the EU is seizing the opportunity to deepen ties. She noted that personnel from EU naval operations Atalanta and Aspides participated in India's Republic Day parade for the first time.
(inputs from PTI, ANI, Reuters)